Bitcoin Active Addresses Drop 39% as Long-Term Holders Tighten Grip on Supply
Bitcoin’s on-chain activity has entered a pronounced lull, with active addresses falling 39.80% over the past two weeks. The number of daily active addresses dropped from 821,000 to 494,000, data from Glassnode shows, reflecting a sharp decline in network usage as the cryptocurrency consolidates in a narrow price range.
The drop in active addresses coincides with a broader weakening in apparent Bitcoin demand, which registered a reading of -147,000 BTC over the same period. That figure marks the weakest accumulation signal recorded since late 2025, suggesting that net new buying interest has evaporated among short-term participants and smaller traders.
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On-Chain Activity Signals Supply Shift
The contraction in active addresses is not necessarily bearish, analysts note. It often accompanies periods where long-term holders — wallets that have not moved coins in at least 155 days — are accumulating or simply holding, rather than trading. When short-term speculation fades, active address counts tend to fall as fewer transactions occur on a daily basis.
Data from CoinMetrics indicates that the share of Bitcoin supply held by long-term holders has risen to 75.2%, up from 72.8% at the start of the year. This suggests that coins are moving away from exchanges and into cold storage or long-term custody wallets, reducing the liquid supply available for trading.
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“The market is in a classic accumulation phase where conviction holders are absorbing supply from weaker hands,” said James Butterfill, head of research at CoinShares, in a note to clients. “The decline in active addresses is consistent with this pattern — fewer transactions, but those that do occur are meaningful.”
Bitcoin-Liquidity Correlation Hits Rare Extreme
Adding to the unusual backdrop, Bitcoin’s correlation with global liquidity has fallen below the -2 sigma band, a statistical extreme not observed in nearly a decade. The metric, which tracks how closely Bitcoin’s price moves relative to changes in global central bank balance sheets and money supply, has turned deeply negative.
According to data from Reflexivity Research, the correlation coefficient has dropped to -0.42, meaning Bitcoin is currently moving inversely to global liquidity conditions. In previous cycles, Bitcoin has tended to rise when global liquidity expands and fall when it contracts. The current divergence suggests that internal market dynamics — specifically the shift toward long-term holding — are overriding macro liquidity signals.
“This is a rare decoupling event,” said Mike McGlone, senior macro strategist at Bloomberg Intelligence. “Bitcoin is behaving less like a risk asset and more like a store-of-value asset during this phase. The market is pricing in scarcity rather than liquidity.”
What the Data Means for Traders
The combination of falling active addresses, negative apparent demand, and an extreme liquidity correlation break has historically preceded significant price moves in either direction. In 2019, a similar pattern of declining on-chain activity preceded a 200% rally over the following six months. However, in mid-2021, a comparable setup preceded a sharp correction.
The key variable, analysts say, is whether the current decline in active addresses is driven by genuine long-term accumulation or by a loss of interest from retail participants. If the former, the setup could be bullish over a multi-month horizon. If the latter, the market may face a prolonged period of low volatility and declining participation.
For now, the data points toward a market increasingly dominated by long-term holders, with short-term traders stepping aside. Whether that dynamic leads to a supply squeeze or a slow drift lower will depend on whether demand re-emerges from new buyers.
